Medicaid is a health insurance program for low-income individuals that is jointly funded by the federal and state governments. Created by Title XIX of the Social Security Act, in 1965, the Medicaid program is different from Medicare. Medicare is entirely a federal program that does not involve state government. Medicaid, by contrast, is administered entirely by each of the fifty states within their borders. Medical billing for beneficiaries covered by the Medicaid program is different from billing other government healthcare programs, and from billing commercial health insurance carriers. Within a single state, a number of Medicaid plans may be active, each of these with their own requirements. Trained medical billers and coders understand all these differences in order to receive appropriate reimbursement for provided services.

Who is Eligible for Medicaid?

The Centers for Medicare and Medicaid Services (CMS) provides guidance to the states related to who qualifies for Medicaid coverage. CMS advises the states of the minimum requirements for eligibility, as well as the minimum healthcare services that must be covered. Backed by federal mandates and statutes, CMS monitors state activity to ensure compliance with these minimum requirements. The basic program is designed to pay for healthcare received by qualified, low-income beneficiaries, their children, and some people with disabilities. States can expand eligibility requirements, as well as cover services that are not mandated by Title XIX of the Social Security Act.

In order to receive maximum, legal reimbursement for medical services, professional medical billers need to be aware of the Medicare programs in force in their state. The Patient Protection and Affordable Care Act of 2010 (PPACA) will expand Medicaid eligibility beginning in 2014. As more people become eligible for Medicaid coverage, medical billers must be familiar with their state’s billing protocols and coding methodologies. They are the experts within a medical practice who know how the rules, and how to apply them.

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Some states administer their Medicaid programs in conjunction with their Children’s Health Insurance Program (CHIP) plans. CHIP is designed to offer healthcare coverage for children from families that earn too much to qualify for Medicaid but do not earn enough to affordably purchase commercial health insurance. CHIP may be bundled into a state’s overall Medicaid plan following the same rules, or it may exist independently, with rules of its own.

Medicaid Billing and Coding Requirements

Because there are more than fifty Medicaid programs in the United States, it is impossible to make blanket recommendations regarding how to code and submit Medicaid claims. A person looking to enter the medical billing or medical coding field benefits from a formal course of study located in the state in which they will be working.

While the Health Care Portability and Accountability Act of 1996 (HIPPA) mandates that HCPCS codes be used for all healthcare reimbursement transactions, the interpretations of codes are left up to each third-party payer. The PPACA requires all Medicaid programs to implement National Correct Coding Initiative (NCCI) edits for all Medicaid claims. While state agencies have implemented NCCI, they still maintain authority to interpret coding methodologies above and beyond those mandated by NCCI. Medical coders, who provide the codes to the medical billers who create healthcare claims for Medicaid-covered services, must be aware of their state program’s requirements. A thorough understanding will guarantee that clean claims are submitted, and that they will be paid in a timely manner.

Though NCCI may mandate that some codes cannot reasonably be reported together for medically necessary services, state Medicaid administrators can develop their own policies that require specific modifiers to codes that will circumvent Medicaid NCCI edits, as long as the modifiers are appropriate and the reasons are documented in the patient’s medical record.

Is There More than One Medicaid Program?

There are fifty states, and there are more than fifty Medicaid programs in operation. States may apply to CMS for waivers to the Medicaid program to limit access to care. Through the use of managed care organizations, states can direct patients to a primary care provider (PCP) who acts as a gatekeeper, coordinating access to healthcare for patients assigned to them.

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States can administer their Medicaid plans directly, or they can contract the administration of their Medicaid programs to third-party contractors. The managed care model has been adopted by many states, and some states provide more than one coverage option. For example, on February 1, 2012, Louisiana relinquished its direct control of its managed care model to five separate third-party contractors. All the patients covered by these five plans are still covered by Louisiana’s Medicaid program, but the claim reporting requirements varies according to which of the five plans in which the patient is enrolled.

A professional medical biller in any healthcare setting needs to be aware of his or her state’s Medicaid plan or plans, and those plans’ administrative requirements. Plans with a strong PCP orientation may require that a referral or authorization number be included on a claim form. That number needs to be included in a specific block of the HCFA-1500 claim form used to report most medically necessary services. Certified medical coders need to be able to assign appropriate modifiers to procedure codes to accurately describe provided services to the guidelines set by Medicaid payers.

Knowing the Rules

Most every Medicaid payer has a website that details that payer’s medical coding and medical billing requirements. People interested in becoming a professional medical biller or a professional medical coder are advised to explore these sites. It will soon become apparent that Medicaid billing and Medicaid coding is a complex task that requires understanding of a number of variables. Medical billing and medical coding instructions are written for professionals in the specialized language of the field. In an era of state budget shortfalls, few Medicaid programs offer ongoing, personalized training or hardcopy manuals. Instead, they provide manuals and detailed instructions on their websites.

Much of the instructions that Medicaid carriers provide is specific to one particular program. It can seem unintelligible to someone without the training to decipher the meaning behind the terminology. According to CMS, more than 60,000,000 people were covered by Medicaid in 2010. With the expansion of Medicaid coverage under the PPACA in 2014, the ability to navigate the regulations and standards that each plan follows will become more a part of daily medical billing and medical coding. The demand for professional medical billers and certified medical coders who understand their state’s Medicare programs will also increase.

Medicaid Integrity

Medicaid spending currently accounts for almost 2% of the U.S. gross domestic product. In Alaska, Medicaid spending exceeded one trillion dollars in 2010 for more than 140,000 enrollees. Many state Medicaid programs have instituted the use of Medicaid Integrity Contractors (MICs) that are authorized to audit claims that have already been paid to detect coding errors and recoup the fees that were paid for them.

While the majority of healthcare institutions do not submit fraudulent claims to the Medicaid program, every healthcare institution values the professionals who can create claims that will pass audits conducted by a MIC. Submitting clean claims, regardless of the payer, is the standard to which professional medical billers adhere. Certified medical coders work with the billers to ensure that every healthcare claim is accurate according to the contractual standards set by the payer. Formal, professional training leaves little to chance when healthcare facilities employ professional medical billers and certified medical coders who have graduated from an accredited program.